Moray Council Best Value Assurance Report

Moray Council Best Value Assurance Report Prepared for the Accounts Commission by the Controller of Audit August 2020 The Accounts Commission The Accounts Commission is the public spending watchdog for local government. We hold councils in Scotland to account and help them improve. We operate impartially and independently of councils and of the Scottish Government, and we meet and report in public. We expect councils to achieve the highest standards of governance and financial stewardship, and value for money in how they use their resources and provide their services. Our work includes: • securing and acting upon the external audit of Scotland’s councils and various joint boards and committees • assessing the performance of councils in relation to Best Value and community planning • carrying out national performance audits to help councils improve their services • requiring councils to publish information to help the public assess their performance. You can find out more about the work of the Accounts Commission on our website: www.audit-scotland.gov.uk/about-us/accounts-commission Audit Scotland is a statutory body set up in April 2000 under the Public Finance and Accountability (Scotland) Act 2000. We help the Auditor General for Scotland and the Accounts Commission check that organisations spending public money use it properly, efficiently and effectively. Moray Council Best Value Assurance Report | 3 Contents Key facts 4 Audit approach 5 Key messages 7 Part 1 8 Does the council have clear strategic direction? Part 2 14 How well is the council performing? Part 3 19 Is the council using its resources effectively? Part 4 27 Is the council working well with its partners? Part 5 34 Is the council demonstrating continuous improvement? Recommendations 38 Appendix 1 39 Best Value audit timeline 4 | Key facts Area: 2,238 sq. KM (864 square miles) Population: 95,520 Council workforce: 3,500 (number of full-time equivalent employees) Elected members: • 9 Scottish National Party • 9 Conservative and Unionist • 7 Independent • 1 Scottish Labour Council houses: 6,121 Net Revenue Budget £212 million (2020/21) Capital budget £42 million (2020/21) best value Budget gap £20 million 2020/21 – 2022/23 Audit approach | 5 Audit approach 1. The statutory duty of Best Value was introduced in the Local Government in Scotland Act 2003. The audit of Best Value is a continuous process that forms part of the annual audit of every council. Findings are reported each year through the Annual Audit Report. In addition, the Controller of Audit will present a Best Value Assurance Report to the Accounts Commission at least once during the five year audit appointment for each council. 2. This report seeks to provide the Commission with assurance on the council’s statutory duty to deliver Best Value, with a particular focus on the Commission’s Strategic Audit Priorities. We are looking for councils to demonstrate Best Value by showing continuous improvement in how they deliver services. The pace and depth of this improvement is key to how well councils meet their priorities in the future. Our audit approach is proportionate and risk based and so is reflective of the context, risks and performance of the individual council. It also draws on the intelligence from audit and scrutiny work carried out in previous years. 3. We conducted some initial work to identify risks and council initiatives to build into the scope of our audit. This included a review of previous audit and inspection reports and intelligence, review of key council documents, initial meetings with senior officers and reflection on our wider public sector knowledge and experience. Key areas of focus for our audit included (Exhibit 1): Exhibit 1 Key areas of focus for our audit Vision and strategic direction • Moray Council vision and priorities and how these fit with the LOIP • Leadership, governance and scrutiny Performance • Overall progress on performance and outcomes • Developing performance reporting arrangements, including public performance reporting Use of resources • Financial position and future planning • Asset condition and capital maintenance programmes • Workforce planning Partnership working • Partnership working arrangements 6 | • Community engagement and empowerment Continuous improvement • Improvement and modernisation programme • Progress against keys judgements in 2015 follow up report Source: Audit Scotland 4. The detailed audit work for this report was undertaken in November and December 2019. Our audit work included: • interviews with elected members and senior officers • observing a range of council and committee meetings • document review • interviews with partners and outside agencies 5. The fieldwork for this report was conducted before the COVID-19 (coronavirus disease) outbreak in Scotland. The outbreak has brought unprecedented challenges to organisations around the country. It is not yet known what long-term impacts these will have on populations and on the delivery of public services, but they will be significant and could continue for some time. The report does not consider the impact of COVID-19 on the council, or the implications for the audit findings and conclusions. However, the principles of sound financial management, good governance, public accountability and transparency remain vital. 6. We will continue to audit Best Value at the council over the course of our audit appointment. This will include a follow-up on the findings from this report as well as more detailed audit work on other Best Value characteristics as appropriate. 7. We gratefully acknowledge the cooperation and assistance provided to the audit team by all elected members and officers contacted during the audit. Key messages | 7 Key messages 1 The council has received six Best Value reports since 2006 consistently highlighting Best Value issues and slow progress in addressing these. This has continued, since 2015, with political instability and lack of focus resulting in a slow pace of change. Recent progress is now being made toward some significant strategic decisions. 2 Recent progress includes a corporate management team restructure, committee structure review, new performance management framework and a review of the learning estate strategy. Most of these are still at an early stage. Progress against the council’s transformational plan has so far been limited. 3 The council’s financial position is extremely challenging, and it continues to rely on lots of small savings and using reserves to balance its budget. This is unsustainable over the medium-term and the council is at risk of depleting its general fund reserves in four years. 4 Performance reporting in the council focuses on each service but it is difficult to see how this contributes to the council achieving its overall priorities. The council is implementing its revised performance management framework and is developing wider corporate indicators. 5 Performance relative to other councils has deteriorated over the past five years, particularly in educational attainment. Overall Moray is one of the lowest performing Scottish local authorities, a significant decline since 2014/15, when Moray was placed 12th. The council has put in place additional measures to give young people more opportunities to improve attainment. 6 Council properties are in poor condition predominantly because the condition of Moray’s learning estate is the worst in Scotland. The council has previously found it difficult to make decisions regarding key assets, but it is now starting to work together to agree and implement strategies. 7 Workforce morale is good and staff commitment to change is positive, but staff survey responses have identified workload issues. The capacity of staff to deliver change has been identified as a limiting factor in several areas in this report. This represents a significant risk in delivering Best Value going forward. 8 The strategic focus of the Community Planning Partnership (CPP) on outcome and performance has also been slow to improve, though the CPP demonstrated good partnership working in addressing issues in children’s services. 9 The council demonstrates some good progress in implementing community empowerment and has developed a corporate engagement strategy to involve communities in the future of council services. 8 | Part 1 Does the council have clear strategic direction? The council recognises its key challenges and has a consistent vision and overall priorities. Historically the council has been slow to deliver Best Value characteristics. Since the last Best Value report in 2015, political instability and lack of focus has continued the slow pace of change, but recent progress is being made towards some significant strategic decisions. The corporate management team has been restructured and the committee structure is being reviewed to provide a more strategic approach. The council recognises the key challenges it faces 8. Moray Council is the eighth largest council by land area in Scotland, covering an area from the Cairngorm mountains to the Moray Firth coast of the North Sea. 9. At June 2018, the population of Moray was 95,520 (22nd out of 32 Scottish local authorities. Its main towns are Elgin (population 23,000), Forres and Buckie. The remaining population is distributed across smaller rural and coastal communities. Total population is projected to increase to 100,251 by 2026. Population and household growth are above the Scottish average. 10. The council has a higher percentage of older people than the national

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